Disaster Would Strike If U.S. Cuts Pakistan Aid

The move by the House and Senate to freeze about $700 million in aid to Pakistan, plus a dismal economic outlook for the embattled ally of the U.S., may strain relations with the country even further. With the stability of Pakistan in question, this election season may see frightening developments within the region.

The United States should try to prevent an economic calamity in Pakistan. While propping up the status quo for a country that has behaved like an enemy rather than an ally at times seems hard to rationalize, the U.S. is now in a foreign policy position of making choices that are either bad or worse.

Congress’ move for an aid freeze comes out of concern that the Pakistani government is not doing enough to curb the production of ammonium nitrate by Pakistani fertilizer companies, a key ingredient for creating improvised explosive devices (IEDs). Pakistan has produced 300,000 metric tons of ammonium nitrate since 2004. Representative Howard McKeon (R-Calif.) wants “assurance” by Islamabad to stop the homemade production of bombs that kill U.S. soldiers in neighboring Afghanistan. Pakistani Salim Saifullah Khan, senator and chairman of the country’s foreign relations committee, said on this matter, “I do not see any good coming out of this”.

Amid speculation that the U.S. may indeed cut foreign aid, money that is vital for Pakistan’s economy to sustain itself, Pakistan’s rupee has declined in value. The International Monetary Fund forecast for the country is bleak at best with a projected growth 3.5% for the next fiscal year, a $1.6 billion deficit, a Standard and Poor’s rating of B-, and a Moody’s score of B3. What’s more, Pakistan must begin its payment for its loan by the IMF in early 2012 with a $1.1 billion payment for the second half of that year. The currency value decline has put Pakistani exporters in a position to hold on to their dollars thus putting much needed investment to a standstill.

Combine this with increasing military hostility regarding an accidental U.S. drone attack of a Pakistani military outpost in Novemeber which killed 24 Pakistani soldiers and the resulted in a fuel transportation halt by Pakistani State Oil to Afghanistan, and the picture becomes even darker. The Pakistanis are demanding the U.S. vacate a nearby base associated with drone attacks as well.

Stability is in question as a flood in Sindh Southern Province has killed 300 people and destroyed 1.4 million homes. Rumors are spreading that Pakistani President Asif Ali Zardari may resign after a recent heart attack. Pakistani leaders, seen as corrupt by their own population, have also had to deny their talks with the Pakistani Taliban as well as ISI complicity with recent assassinations in Afghanistan.

Recent Gallup poll data of the Pakistani population reveals nearly half of Pakistanis are critical of U.S. terror efforts in the region. However, a correlation with overall anger and economic standing has been established by the data. Those with better jobs and income are less likely to be angry. A large 86% rank the military as their country’s most reputable institution compared to only 26% believing in the integrity of their government.

A drop in aid may increase these hostilities even more. Cooperation with Pakistan on U.S. efforts in Afghanistan is critical as a stable Pakistan helps stabilize Afghanistan. Solutions may include giving Pakistan the full amount of aid it was expecting to help ease the strain of paying off the IMF next year. The United States Agency for International Development (USAID) has experience with flood response and direct assistance by the U.S. to Pakistanis hurt by the recent flooding may ease tensions. Hopefully lawmakers will observe the situation with Pakistan carefully, as every move looks like a bad one. The worst move however, is doing nothing to prevent nuclear Pakistan sliding into socio-political and economic catastrophe.